“Rule of Law” is both a play on my name, and a statement of my values. The rule of law is a foundation for both our liberties and for order. The rule of law respects us as equals. It allows us to organize our lives, plan our futures, and resolve disputes in a rational way. There are those around the world and throughout history who have fought in great struggles for the rule of law. My role is more modest. I am a lawyer at the law firm of Sabey Rule LLP who works with people, assisting them with estate planning, probate and estate administration. I also assist people in resolving disputes about wills and estates. In this blog, I write about some of the legal topics that I deal with in my law practice, and about other legal issues that interest me. In doing so, I hope that I help others learn more about law, and that I encourage discussion about law and law reform. I hope that, in some small way, I help nurture the rule of law. You may contact me at my office at #201 - 401 Glenmore Rd., Kelowna, B.C., Canada; V1V 1Z6; telephone number: (250) 762-6111; email: s.rule@sabeyrule.ca.

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Saturday, February 07, 2009

Quallie v. Vandervelde

On April 30, 2005, Gretha Vandervelde went to the hospital after a fall. When she went to the hospital she was confused and agitated. Her clinical records indicate that she suffered from dementia and delirium. On May 2, 2005, she took a Mini Mental Status Exam and scored 16 out of 30, not a good score. This was her second fall in ten days. She also had terminal cancer in her lungs and brain.

On May 4, she signed a transfer of her house into a joint tenancy with two of her daughters, the effect of which was that on her death over 5 months later, the title to her house went to two of her daughters, to the exclusion of her other daughter, Betty Quallie.

After her mother’s death, Ms. Quallie sued her sisters. Ms. Quallie alleged that her mother did not have the mental capacity to transfer the house into a joint tenancy with Ms. Quallie’s sisters.

Although her mother named her as a beneficiary of her will, she was effectively disinherited. In addition to transferring the house into the joint tenancy, her mother transferred funds into joint bank accounts with her sisters, and named them as beneficiaries of her Registered Retirement Income Funds. Although Ms. Quallie was named as a beneficiary in her mother’s will, if these transactions were upheld, there would be nothing in the estate to flow to Ms. Quallie under the will.

From the facts I have recited—as you will see, I have not told the whole story—it would appear doubtful that Ms. Quallie could have had the capacity to transfer the house. Yet, Mr. Justice Macaulay, in Quallie v. Vandervelde, 2009 BCSC 5, found that she did have capacity and upheld the transfer.

At the time of the transfer, Ms. Quallie and her mother were not on good terms. After the death of Ms. Quallie’s father (which appears to have been earlier in 2005), her mother became angry at her. There had been other periods of estrangement, but each time Ms. Quallie and her mother made up. Sadly, on this occasion, they never spoke again.

In February 2005, Gretha Vandervelde spoke with her financial adviser, who asked her about her estate planning. She told him that she did not want her assets to go to Ms. Quallie. He suggested setting up joint accounts with her other daughters, and naming them as beneficiaries of her Registered Retirement Income Funds. She did so.

She met with a lawyer, Stephen Miller, in March, 2005. Two of her daughters were present part of the time, but Mr. Miller also met alone with Ms. Vandervelde. She was able to describe the nature of her assets and was fully lucid. He was aware that she had brain cancer and paid close attention to her capacity. He was satisfied she had capacity to change her estate plan, and that her daughters were not unduly influencing her. After he discussed her options for disinheriting Ms. Quallie, she said she would consider them.

Mr. Miller saw Mrs. Vandervelde again in the hospital on May 3, 2005, for her to sign a power of attorney. She told him again that she wanted to exclude Ms. Quallie, and explained her reasons. He believed that she had capacity to transfer her house.

Mr. Miller then prepared the transfer of Ms. Quallie’s house into a joint tenancy with two of her daughters so that the house would bypass her estate and flow to the two daughters by right of survivorship.

On each visit, he met alone with Ms. Quallie. When the two benefitting daughters returned to the room, they tried to talk their mother out of disinheriting their sister, but she was firm.

Mr. Justice Macaulay held that the degree of understanding required of Mrs. Vandervelde for her to have capacity to transfer the house into a joint tenancy was as high as the capacity to make a will. She would need to:

1. Understand what she was doing;2. Comprehend and recollect what property she had; and3. Remember the persons she might expect to benefit.

In this case, Mr. Justice Macaulay found that Mrs. Vandervelde did understand what she was doing, knew her assets, and whom she might expect to benefit. The evidence of the financial planner, Mr. Miller, and her treating physician (which I will get to shortly), supported the defendants position that their mother had capacity. Mr. Justice Macaulay upheld the transfer of the house into a joint tenancy.

What about the evidence of confusion, dementia and delirium?

Her physician, Dr. Killick, gave evidence that he had prescribed narcotics on April 20, 2005 to Ms. Quallie for her arthritis. There was also evidence that she had been given morphine for pain from the falls. The medication likely caused her mental symptoms, from which she recovered as her medication was reduced. On May 3, the nurses’ notes indicate that she was aware of time place and person.

Mrs. Vandervelde’s previous physician, Dr. Goldberger gave evidence that the low Mini Mental Status Exam score could have been caused by the effects of the drugs, and that the effects would be temporary, followed by quick improvement as the levels were reduced.

Mr. Justice Macaulay found that by May 4, 2004, Mrs. Vandervelde had returned to full mental capacity.

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Rule of Law web-log is intended for general educational purposes only, and you may not rely on its contents for legal advice. Please keep in mind that the laws of British Columbia are often different from the laws of other Provinces of Canada, States of the United States of America, and other countries. Furthermore, the law changes, and what was once an accurate statement of the law, may now be outdated and inaccurate. If you have a specific legal problem or issue, please consult a lawyer who is familiar with the laws of your province, state or country. Neither reading this blog, nor sending me an unsolicited email will create a solicitor and client relationship with me.